Should government lead entrepreneurship?
Is government able and positioned/ in the right position to lead entrepreneurship?
Is government up to managing and leading entrepreneurship?
Is government the ideal leader/ manager of entrepreneurship?
Is government adequately equipped to manage and lead entrepreneurship, and does government have the proper and appropriate metrics to lead and manage entrepreneurship?
Are the metrics used to manage and lead entrepreneurship appropriate?
Defintely not, but government support for entrepreneurial education programs can make sense.
It is very much agreed that the entrepreneur contribution plays a crucial role on nation's economic development. On the other hand government support towards entrepreneurship also important. But Government need not take lead.
The other part of discussion cannot be generalize to all the Nation as a whole.
Thank you.
Which government? Developed country or underdeveloped? It is no need to lead in a developed country. It must be a leader in an underdeveloped country.
No, government should not lead entrepreneurship but they can promote entrepreneurship. For example, they should enhance and encourage competition amongst the foreign players, which enhances growth and productivity among the local players.
https://www.quora.com/What-role-should-government-play-in-promoting-entrepreneurship
These are very complicated questions with very different answers in the IPE literature when looking at entrepreneurship in aggregate. One the one side are the neoclassicists like Milton Friedman, who see any form of central planning to be deleterious because of informational and organizational challenges associated with central planning.
On the other end of the extreme are the New Trade Theory people--e.g., Krugman and Bernard, Redding and Schott that find a benefit to strategic trade policy. Under conditions of increasing returns to scale and relatively equal factor endowments among nations, it is mostly accidental as to where highly differentiated products are produced. Trade restrictions and domestic subsidies can allow nations to enter already occupied markets with a competing product by altering the payoff matrix of the new entrant. Think of Airbus as the classic example.
There is certainly a place for government support of R&D, whether through direct subsidy or indirectly through the tax code as well as supporting the ecosystem that sustains entrepreneurial activity, whether equity or bank finance, insurance, human resources policy, etc. Plus there is the question of exit for a new firm. Does regulation smooth or hinder the path of a new firm to public offering? For example, there is plenty of evidence that the Sarb-Ox regulations that were imposed in the wake of the Enron scandal choked off the IPO path for many firms.
From the perspective of the individual firm or entrepreneur, government has a role to play but not to the extent of picking winners and losers, however government definitely has a role in creating a business climate that benefits entrepreneurship. It is a basic truism that if you want more of something, subsidize it, and if you want less of something, you tax it.
In certain areas there is no denying that a government if it chooses, can create market dominating firms through trade policy: China in 5G with ZTE and Huawei; EU with Airbus; France with Areva in nuclear power. Whether it should is as much a question of national security as it is economics.
Many state that gov should not lead entrepreneurship, and only promote it, but in my thinking i think gov is actually much of an active leader of entrepreneurship, particularly through policy. Gov typically have agendas and interests in entrepreneurship and do pursue these, which may make them a leader or shaper of entrepreneurship.
@Soner, you raise an interesting point. I actually dont think it is much different between developing and developed countries. I think gov's involvement in entrepreneurship is much the same or even more for developed countries.
If gov is going to be involved in entrepreneurship, it better be and must make sure it is/ acts like a good leader.
The question then also becomes whether gov is using the right metrics to manage and steer entrepreneurship.
Dear Brian
Today, the state should not lead to entrepreneurship in developed countries. If there is no equal opportunity in education, if there is no equal income distribution in economic terms, if the level of life quality is poor,...etc., then the state should lead the entrepreneurship. This is the case in many countries. For example, in African countries.
I don't think govt. needs to indulge in entrepreneurial role. It need to act as promoter and facilitator by designing pro business policies. Govt. needs to give impetus to entrepreneurship like our Prime Minister Narender Modi (India) by starting the Make in India and Startup initiatives.
Not good for any government to be involved in setting up businesses of using taxpayers money in some financial win or loose venture. Should focus on governing period. Very bad mix.
@Soner, gov entrepreneurship policy is more developed in developed countries than developing countries, so gov in developed countries is acting as a leader of entrepreneurship more in developed countries than developing countries.
It is the same as asking who is leading education or healthcare. Entrepreneurship is an orphan without its own representation. Do you really see a body of entrepreneurs that represent themself, like a trade union? By setting (its) policies, gov acts as the leader of entrepreneurship - gov has a predominant say over (the fate of) entrepreneurship. If you determine somethings fate, i see that as being a leader thereof.
Entrepreneurship/ entrepreneurs are not organized enough to determine and set their own fate.
People dont want gov to lead entrepreneurship, but in my mind, it is.
Entrepreneurship is one of the important ingredient for the development of nation. Therefore, yes the govt should take active role in promoting the entrepreneurship by creating opportunities for the public directly or indirectly.
The entrepreneur opens his own paths. The best thing the government does is not get in the way-something rare.
@Brain, I strongly agree with you. However, if there is no qualified labor in a country where there is a shortage of finance, where capital is not sufficiently developed, then the state will have to lead (today, like as Somali). While setting up a factory with the capital in hand, it should also train people who will provide raw materials and process those raw materials. If there are investors who will come out after this is achieved, then the state should be withdrawn from that area. There is no need for them in an advanced country.
If he has this entrepreneurial spirit, it risks that some general interests will be flouted. The mechanism of supply and demand is not always good in some cases unless its entrepreneurial intervention is selective. If the state is an entrepreneur, it risks that its social and political mission is displaced. It will be the disaster! Sorry, I'm not English-speaking so mistakes!
all true. however, i think government stepping in, and stepping away, occurs less 'smooth' and 'seamless' in practice.
This is a tricky question because promoting and leading can be very different things. As the government leading with healthcare, it turns out to be awful and too controlling but with the right mixture we see great innovations. Although I think encouraging entrepreneurs through policies indirectly gives companies more freedom to be creative in their endeavors. As far as government role for impoverished countries, we can see a good number are not making tremendous stride due to corruption as it would be their role to take on though.
the government should finance and provide opportunities
for entrepreneurship, and schools should have
"the doors open" to companies to apply these potentialities.
The government can put policies in place that support or constrain entrepreneurship. What they 'should' do is enable the development of a healthy, inclusive society of which entrepreneurship is a part. That will look different depending on the country and its culture.
I have now gathered more than five years of experience teaching, mentoring and managing entrepreneurship programs in Spain with governmental support. My conclusions are: i) Government just cannot "lead" entrepreneurship, this question is irrelevant as there is nothing less entrepreneurial than government officials; 2) Government can very well "foster, promote, support" Entrepreneurship, and in fact it should, both at the educational and financial levels; the first one in Elementary School, High School, and Graduate Education, in that priority order; the second one, through tax and social security reductions or exemptions, through mild credit with low interest rates and delayed paybacks, but never through direct subsidization; 3) a strong evaluation and continuous improvement system should be put in place in order to guarantee the effectiveness of such policies; 4) an agreement on the matter among different political parties is a requirement to the success of such programs in the long run.
As a business strategist and entrepreneur, I will say this discussion might benefit by using different language. "Lead" is a precarious term and for many suggests a role of "active management". In my opinion, that is inappropriate for government. Government's leadership would stimulate inventions/progress when it convenes the best brains to shape a direction, a need or priority, and then provides the funds and other resources that would stimulate success. As a small business owner, I know that it is very hard to get the support needed to obtain "leadership" from government. Leadership is stimulating growth- institutional and personal. That is really needed.
It depends! In Singapore and China, government have a lot say in entrepreneurship while in government-as-night-watcher paradigm, that is obviously out of their expected functions.
You are absolutely right- most of these questions require consideration of societal norms. Thanks for adding this important dimension to the dialog.
Have you visited my website? This is a classic example that government might want to take a bold role in our demographic, and societal and labor market shifts. This is a global problem that is hanging out without an owner. And our citizens suffer, families are feeling shame of caring vs. work conflicts.
I like to use practical examples to make a point so, I am attaching a document that you might want to scan. This is a global problem, not just USA. 30% of workers in Asia are caregivers and impacting major economic, labor and family risks . ( I am not selling membership to you ---this is just a short document!) Take care. J
Of course, entrepreneurship is in the realm of the private sector. But in recent decades, the government has also been involved in entrepreneurship, and that contribution was supportive policy in the field of entrepreneurship.
The role of government in entrepreneurship:
1-The government and government managers should pave the way for entrepreneurship for the private sector by creating new laws and reforming existing laws.
2-Facilitate the entrepreneurial process through financial support and provision of resources for entrepreneurs.
3-Education and culture and the introduction of successful entrepreneurs
Supportive " policy" is needed, but without incentives...does anything happen? Every country has a "norm" of what policy means... to some it is a statement to others it is a management system/structure. Entrepreneurs need financial , management, technology and other real supports. Policy can do that...if the source and use of funds/resources is very precise.and leadership reinforces the interest in positive outcomes.
yes entrepreneurship is important for economy and government should support.
Government should support entrepreneurship. BUT they should never lead entrepreneurship because typical government processes and procedures are steeped in bureaucracies, thereby being a stumbling block to necessary and timely change. The role of government needs to be limited to enabling policy and infrastructural development.
I would fully support a FREE OF ALL TIES funding policy provided by government but I doubt this would happen! The government are generally too rigid in their design and delivery of funding opportunities, resulting in innovation and innovators (social entrepreneurs such as myself) exiting local government employment and creating businesses and social enterprise organisations. You cannot manage and entrepreneur (social or otherwise); we are notorious for creating business opportunities and bespoke solutions that emerge from the gaps created by government and corporate organisations that take too long to change and meet (often critical) needs. The current government is practically stifling entrepreneurship in the UK with IR35 legislation (aimed at a minority of people in disguised employment). Far from ideal in my opinion.
In currently functioning, developing economies, governments support the development of entrepreneurship using various instruments of active economic policy, leading anti-crisis, pro-development, Keynesian state interventionism. However, in individual countries the results of these pro-development economic policies are diversified, because different instruments of economic policy, including fiscal, financial, monetary, pro-innovation policy, etc. are used in particular countries. In addition, there are different macroeconomic and other macroeconomic situation in individual countries. public finances, a different level of budget deficit, public debt so there are other possibilities to finance entrepreneurship activation programs.
It depends upon the willingness of government and fabrication of policy to facilitate the younger entrepreneurs
Ultimately government is benefitted in the long run
In my opinion, the government should support entrepreneurship if the level of economic growth is deemed insufficient and there is high structural, cyclical unemployment, etc. Government support for entrepreneurship should be part of an active, pro-development socio-economic policy. In the context of global climate change, the global warming process, which is progressing faster and faster, governments should also support the development of entrepreneurship in establishing startups developing ecological innovations.
Definitely the governments should support entrepreneurship but the most important problem that can be put forward in the name of entrepreneurship in the world the fact that a standard initiative and management model cannot be successful in every society.
Undoubtedly yes. The government should support entrepreneurship, basically in the level of policy making.
According the Triple Helix Model of innovation, academia should lead the government and the industry. Entrepreneurship works as a bridge between market and academia. Governments and industries are closely involved in the Innovation process but they don't lead it. Governments should support it, and industries implement and benefit from it.
entrepreneurship is very necessary for society and government should support it.
Dear Colleagues and Friends from RG,
In the context of the above considerations, I also propose the following research problem:
Necessary improvement of pro-development policy supporting entrepreneurship.
In many countries, as part of pro-development policy to support entrepreneurship, governments of individual countries allocate specific, different amounts of financial resources to the creation of institutions and funds supporting entrepreneurship. The financial aspect of supporting the establishment and development of business entities is important, however, it does not ensure a high level of effectiveness of the institutional process of supporting entrepreneurship and, therefore, a high efficiency of pro-development entrepreneurship policy, which is an important segment of socio-economic policy. In addition to the financial aspect of supporting the establishment and development of business entities, other elements of entrepreneurship policy, innovation policy, etc. are also important. In order to ensure a high level of effectiveness of the institutional process of supporting entrepreneurship and thus high efficiency of pro-development entrepreneurship policy, which is an important segment of socio-economic policy, it is also to improve performance public institutions that have been established as institutional instruments to support the processes of establishing and developing business entities, including innovative start-ups.
An indispensable element of increasing the efficiency of the institutional system of activating entrepreneurship and innovation in the field of business activity is the improvement of control and audit systems in order to reduce the scale of mismanagement, financial embezzlement and waste of public funds, which are awarded for subsidies granted by public offices to business entities and supporting entrepreneurship. It is also necessary to improve operational risk management systems, including personnel and technological improvement of public institutions established to support the activities of business entities, activation of entrepreneurship and innovation as an important element of pro-development, counter-cyclical, anti-crisis and Keynesian socio-economic policy.
In the context of the above discussion, the following questions arise:
How should the improvement of the operation of public institutions, which were established as institutional instruments to support the processes of establishing and developing business entities, including innovative start-ups, be carried out? How should improvement of operational risk management systems, including personnel, and technological improvement of public institutions established to support the activities of business entities, activation of entrepreneurship and innovation as an important element of pro-development, counter-cyclical, anti-crisis, Keynesian socio-economic policy? How should the state effectively support the development of business entities, including the processes of establishing and developing innovative startups?
In my opinion, as part of a pro-development interventionist socio-economic policy, the state should support the development of micro-enterprises and other economic entities of the SME sector, including innovative startups. If the process of supporting the development of SME sector enterprises and innovative startups is conducted effectively, then economic growth may improve significantly, the situation on the labor markets will improve, revenues, investments, consumption, living standards of citizens will increase, as well as tax revenues to the state budget and improve state public finances. Then the state has more money to provide further public goods for citizens, it can implement larger investment projects to create large, durable economic goods, develop communication infrastructure, build housing under public and social housing, and also for further programs supporting the development of enterprises in the SME sector and innovative startups. This is how typical, interventionist, pro-development socio-economic policy is implemented. The importance of improving this type of socio-economic policy grows in periods of economic slowdown in the domestic and global economy. This issue is particularly important in the context of the slowdown in growth of the global economy forecast for the coming years. Therefore, as part of a pro-development, interventionist socio-economic policy, the state should support the development of micro-enterprises and other economic entities of the SME sector, including innovative startups.
Below are the arguments for my thesis.
In connection with the development of new, available through the Internet, new, including social forms of external financing of the development of business entities, the following question still remains: Is innovation in the field of ICT, Industry 4.0, financed through crowdfunding, secured by blockchain, the increase in the use of cryptocurrencies in online settlements etc. are important determinants of the development of innovative, technological startups and factors for the development of the knowledge-based economy in the coming years? From the conducted research and from the above considerations and conclusions resulting from the discussion on interesting issues discussed, I formulated the following conclusions, according to which the development of technological innovations, ICT information technologies, advanced information processing technologies co-creating the current technological revolution Industry 4.0, financing through crowdfunding, securing internet transactions with technology blockchain, the increase in the use of cryptocurrencies in these settlements, etc. may be important determinants of the development of innovative, technological startups operating on the Internet as well as factors of the development of the knowledge-based economy in the coming years.
My research confirms that innovations in the field of ICT, Industry 4.0, financed through crowdfunding, secured by blockchain, increase in the use of cryptocurrencies in online settlements etc. are important determinants of the development of innovative, technological startups and factors of development of the knowledge-based economy in the coming years. However, the issue of external forms of financing, including new, available via the Internet social external forms of financing the establishment and development of commercially-operating business entities does not exhaust the financial needs of entrepreneurship development. These new, external, internet, social forms of financing complement the classic forms of commercial external financing, which include bank loans, para-credit financial instruments such as leasing and factoring as well as financing development activities of enterprises through the issue of securities such as shares and corporate bonds. In addition, commercial forms of external financing that play an important role in the system of entrepreneurship and innovation activation is a particularly important element of this system is to support the development of business entities on the basis of public funding, i.e. subsidies from financial resources granted on preferential conditions that are part of the public system of state finance .
However, the mere allocation of financial resources from the central state budget or local budgets of local government units for subsidies granted to developing business entities will not ensure a high level of effectiveness of the public entrepreneurship activation and innovation system. In addition to the financial aspect of supporting the establishment and development of business entities, other components of entrepreneurship policy, innovation policy, etc. are also particularly important. Therefore, to ensure a high level of effectiveness of the institutional entrepreneurship support process and thus high efficiency of pro-development entrepreneurship and innovation policy, which is an important segment socio-economic policy is also to improve the functioning of public institutions and offices, whose function is to support the processes of establishing and developing economic entities, including innovative start-ups.
The research conducted in this area shows that the development of innovative startups is a particularly important factor in the development of innovation in the economy. In recent years, scientific research and research and implementation work have been carried out in these topics, which further emphasize the high level of significance of innovation, new technologies and entrepreneurship in modern national economies. In recent years, cooperation programs of research and R&D centers with enterprises have been developed in some countries in order to activate entrepreneurship and innovation of business entities. As part of this cooperation, scientific research and research and implementation works are carried out in these topics, which further emphasize the high level of significance of innovation, new technologies and entrepreneurship in contemporary national economies.
In connection with this, clusters are also created, within which enterprises undertake cooperation with other business entities, with scientific and research and implementation centers, universities and public sector institutions in order to exchange experiences, transfer knowledge, conduct and develop joint research and implementation projects in including innovative technological, process, research, organizational and other solutions. In recent years, an increase in entrepreneurship has been observed in many countries in the establishment and development of enterprises and developing companies thanks to the implementation of new information technologies, internet new media, advanced information processing and other technologies of the current, fourth technological revolution known as Industry 4.0 into economic processes. In recent years, entrepreneurship has been growing in the field of business development in the field of applying online marketing innovations, including primarily in the field of viral marketing on social media online portals. Research shows that some micro-enterprises are developing without product, process, technological, marketing innovations, etc. However, many technological startups currently base their development and competitive advantage on technological, product, service, marketing or other innovations.
Unfortunately, however, the classic types of external financing provided on commercial terms for innovative start-ups and other emerging businesses are usually significantly limited or difficult to access. This issue is correlated with the high level of investment risk of development projects planned for implementation by new micro-enterprises, which are now being established, i.e. that do not have a history of functioning on specific markets. For this type of business entities it is difficult to obtain financing for the implementation of development projects with high investment risk and usually also high credit risk. banks are reluctant to grant investment loans to newly created startups basing their development on innovative technologies. In this situation, innovative startups are created and financed from external financing sources such as investment funds, business angels, issue of securities, crowdfunding and others.
To sum up, the government should support entrepreneurship if the level of economic growth is considered insufficient and there is high structural, cyclical unemployment, etc. Government support for entrepreneurship should be an element of active, pro-development socio-economic policy. In the context of global climate change, the global warming process, which is accelerating, governments should also support the development of entrepreneurship in establishing startups developing various types of technological, product, logistics, ecological innovations, etc.
The results of scientific research show that in many countries, as part of the pro-development policy of supporting entrepreneurship, governments of individual countries allocate specific, different amounts of financial resources to creating institutions and funds supporting entrepreneurship. The financial aspect of supporting the establishment and development of business entities is important, however, it does not ensure a high level of effectiveness of the institutional process of supporting entrepreneurship and, therefore, a high efficiency of pro-development entrepreneurship policy, which is an important segment of socio-economic policy. In addition to the financial aspect of supporting the establishment and development of business entities, other elements of entrepreneurship policy, innovation policy, etc. are also important. In order to ensure a high level of effectiveness of the institutional process of supporting entrepreneurship and thus high efficiency of pro-development entrepreneurship policy, which is an important segment of socio-economic policy, it is also to improve performance public institutions that have been established as institutional instruments to support the processes of establishing and developing business entities, including innovative start-ups.
A particularly important element of increasing the effectiveness of the institutional system of activating entrepreneurship and innovation in the field of business activity is the improvement of control and audit systems in order to reduce the scale of mismanagement, financial embezzlement and waste of public funds, which are awarded for subsidies granted by public offices to business entities and supporting entrepreneurship. Therefore, it is also necessary to improve operational risk management systems, including personnel and technological improvement of public institutions established to support the activities of business entities, activation of entrepreneurship and innovation as an important element of pro-development, counter-cyclical, anti-crisis, Keynesian socio-economic policy.
Do you agree with me on the above matter?
Please reply.
I invite you to discussion and scientific cooperation.
Thank you very much.
Best wishes.
Dariusz Prokopowicz
The private sector rather than the government will do a better job in this area. There is evidence from several countries that tge private sector can lead entrepreneurship in a much better ways than the traditional government-based control.
In my opinion, the role of the government in developing entrepreneurship is market regulation (regulatory monetary market / capital market / labor market / goods and services market) rather than interference.
I agree with Dr. Hassan Izzeddin Sarsak
Both government and private sector is important and complement each other.
The issue of activating entrepreneurship as part of the state's economic policy will be particularly important in 2020. Probably now (April 2020) the largest economic crisis in many countries since the 1930s begins. Currently, due to the development of the SARS-CoV-2 Coronavirus pandemic causing Covid-19 disease in 2020, the global economy will slow its growth by several percent. relative to the previous year. In connection with the above, in many countries additional intervention instruments of assistance packages of anti-crisis economic policy are launched to activate and support the development of entrepreneurship.
Regards
Dariusz Prokopowicz
In the economic situation we have now, i.e. in a situation of deep economic recession, it is definitely YES. The state should support entrepreneurship. It is important, however, that it be implemented in a safe manner, without excessive indebtedness of the state finance system, that inflation does not increase strongly and that the risk of liquidity in the system of state finance does not increase significantly. The key issue is, among others, the choice of debt instruments appropriate for a specific economic situation of the country, i.e. the type of these financial instruments, periods of operation, profitability, markets on which these debt instruments will be offered, as well as the type of projects that will be financed through the issue of these securities debt. On the other hand, when the current economic crisis caused by the SARS-CoV-2 coronavirus (Covid-19 disease) pandemic began, one of the first anti-crisis measures in some countries was a significant reduction in interest rates by central banks. It is a significant pro-development instrument if for entrepreneurs loan prices play a key role in the situation of making investment decisions.
Have a nice day, Regards,
Dariusz Prokopowicz
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